GOVERNMENT'S POWER OF EMINENT DOMAIN EXPANDED

Brought to you by the California Association of REALTORS®
In a landmark decision yesterday, the United States Supreme Court held that the government's power of eminent domain may be used to seize someone's private property to turn over to a private developer. This case involved the seizure of 15 homes by the city of New London in Connecticut to use the land as part of a 90-acre redevelopment project by a private developer. Although the city was designated a "distressed municipality," there were no allegations that any of these 15 homes were blighted or in poor condition.

The homeowners challenged the constitutionality of the seizure under the Fifth Amendment's prohibition against the taking of private property for public use without just compensation. The homeowners argued that the government may take their homes against their will for public use, such as to build roads or railroads, but not just to give it to another private party who intends to make more productive use of the property. Whether the homeowners would receive just compensation for the taking was not directly at issue in this case.

In its 5-to-4 decision, the Supreme Court first clarified that, under the Fifth Amendment, the government cannot take someone's private property for the sole benefit of another private party, but it can take private property for use by the public. The Court went on to uphold the government's exercise of eminent domain in this case. The Court reasoned that the taking of private property to promote the city's economic development, which includes creating new jobs and increasing tax revenues, is a public purpose that falls within the public use requirement of the Fifth Amendment.

The name of this case is Kelo, et al. v. City of New London, Connecticut, et al. (2005 WL 1469529). For more information, C.A.R. members may contact C.A.R.'s Member Legal Hotline at 213.739.8282, or for office managers, broker/owners, and designated REALTORS®, call 213.739.8350. Access to Member Legal Hotline is also available through C.A.R. Online at http://www.car.org/index.php?id=NTk2.